Govt seeks clarification from RIL on revised KG-D6 investment plan

New Delhi: The government has asked for certain clarifications from Reliance Industries on the revised investment plan the company had submitted for the main gas producing fields in the eastern offshore KG-D6 block.

RIL and its partners BP plc of UK and Niko Resources "in August 2012 had submitted revised field development plan (RFDP) for D1 & D3 fields with downward revision in reserves," Minister of State for Petroleum & Natural Gas Panabaaka Lakshmi said in a written reply to a question in Rajya Sabha.

Without giving details of the RFDP, she said, "Clarifications have been sought from the operator RIL."

The company had filed revised field development plans for the Dhirubhai-1 and 3 (D1&D3) gas fields as well as D-26 MA oil and gas field - the only producing areas among a total of 19 oil and gas discoveries made in KG-DWN-98/3 or KG-D6 block.

Sources said the company has scaled down capex in D1&D3 fields to USD 5.928 billion from USD 8.836 billion two-phase spending it had proposed in 2006.

In the RFDP for MA field, RIL has scaled down the investment by USD 276 million to USD 1.96 billion. The RFDP for MA field has been approved.

Lakshmi said as per the 2006 development plan, D1&D3 fields were to produce 61.88 million standard cubic metres per day (mmscmd) from 22 wells in 2011-12 and 80 mmscmd from 31 wells in the year thereafter.

"The average gas production from D1&D3 gas fields of KG-D6 block during 2012-13 was about 20.88 mmscmd against the production target of 80 mmscmd," she said. Gas production in April was about 15.89 mmscmd.

The decline in gas output was due to half of the 18 wells put on production ceasing due to water loading/sand ingress.

RIL has stated that gas output lagging projections was also due to "substantial variance in reservoir behavior and character being observed vis-a-vis the prediction and there seemed to be reservoir constraints in achieving the gas production rates," the Minister said.

Also, pressure decline was several times higher than originally envisaged and early water production in some of the wells was not predicted in the initial reservoir simulations, though overall field water production is small, she said.

To a separate question, Oil Minister M Veerappa Moily said RIL has been asked to drill more wells and undertake remedial measures to revive the sick wells.

Besides, the company's proposal to install compressor at onshore terminal to increase gas recovery from D1&D3 has been approved, he said adding that the development plan for another four satellite gas fields has also been approved.